The refiner, India’s biggest buyer of Iranian crude,
received about 85,000 metric tons on Aug. 17, Managing Director
P.P. Upadhya said in a phone interview today from Mangalore. The
company has ordered three more shipments of a similar size, he
said, without stating delivery schedules.

“This is the first cargo we’ve got from Iran this
financial year and we’ll see how many more we can import in the
rest of the year,” Upadhya said. “The same ship has returned
to Iran and will bring the additional cargoes.”

The purchase follows comments from Finance Minister
Palaniappan Chidambaram on Aug. 12 that India plans to import
crude from Iran without breaching United Nations sanctions. The
U.S. and European Union are seeking to curb global trade with
the Persian Gulf nation to halt its nuclear program, which they
say is aimed at producing weapons. Iran says the program is for
civilian purposes.

India is planning the insurance fund to cover refiners
buying crude from Iran, according to Financial Services
Secretary Rajiv Takru. It will be managed by General Insurance
Co. and an initial amount of 5 billion rupees will be offered
soon, he said in an interview yesterday.

Local Insurers

Mangalore Refinery, a unit of Oil & Natural Gas Corp.,
India’s largest oil explorer, and Hindustan Petroleum Corp., the
nation’s third-biggest state-refiner, halted crude purchases
from Iran in April after Indian insurers declined to cover
refineries that process the oil.

“We’ve haven’t started imports from Iran and we won’t
until the insurance issue is fully resolved,” said B.K. Namdeo,
the director for refineries at Hindustan Petroleum in Mumbai.
The company hasn’t bought any of the 1 million tons, or 20,000
barrels a day, it planned to import this year, he said. It
purchased 2.2 million tons in the year ended March 31.

Mangalore Refinery’s shares rose 5 percent to 28.55 rupees,
the biggest gain since June 28, at the close of trading in
Mumbai today. The benchmark S&P BSE Sensex index slid 0.3
percent.

Iran’s Asian customers, including China and South Korea,
have won waivers from the U.S. allowing imports of Iranian crude
because they were able to show purchases had been curbed. While
India has abided by several rounds of UN sanctions on Iran, it
has criticized unilateral American penalties as an infringement
on the Persian Gulf nation’s sovereignty.

India Economy

India imports about 80 percent of its oil, swelling the
country’s current-account deficit, which in turn is hurting
efforts to revive economic growth from its slowest pace in a
decade and weakening the rupee. The currency is the worst
performer in the Asia-Pacific region this year, according to
data compiled by Bloomberg.

India imported about 7.2 percent of its crude from Iran in
the past fiscal year, down from about 11 percent in the previous
12-month period, according to the oil ministry.

Iran has dropped to sixth place, from second a year ago,
among the largest oil producers in the Organization of Petroleum
Exporting Countries. It pumped 2.56 million barrels a day last
month, according to data compiled by Bloomberg.